Monopoly is a type of market in which there isonly one seller producing a commodity having no close substitute.Under monopoly the entry of new firms is strictly prohibited.
Price discrimination refers to a situation when a monopolist charges different prices from differentcustomers for the same commodity at the same time.E.g. BEST charges different prices for consumption of electricity fordomestic use and commercial use.Price discrimination is possible only under the followingconditions.a.The seller is a monopoly firm. b.There are 2 or more than 2 markets for the product
possibility for monopoly product.
Product Differentiation: Product differentiation is the mostimportant feature of monopolistic competition. Since allsellers sell the product which are perfect substitutes for eachother, they go for product differentiation. Every seller makesefforts to show that his product is superior to other products.Product differentiation is practiced in many forms limeadvertisement, brands, trademarks, designs, packaging, colouretc. Thus the products are not homogeneous undermonopolistic competition.
: - Dumping is a device used by the seller to promoteexport and capture foreign market. It refers to the sale of goods inforeign market at a given price which is lower than the selling priceof the same product in the domestic market.Dumping can be practiced under the following conditions only:-
The seller enjoy monopoly in domestic market and
There is perfect competition in the foreign market.
The two different market should have different elasticity of demand.
:- Production cost refers to all the expenses met by the producer in order to produce and shift it to the consumer.Production cost helps to expand supply. It is met by allcommodities which are produced and sold.
11. Selling cost
:- Selling cost refers to only that cost which is incurred tosecure demand. For e.g. expenses on demand. Advertisement,publishing, window, display etc. Selling cost promotes demand andthereby sales. Selling cost is met by all commodities which are sold
Explain the relationship between price, average revenue andmarginal revenue under perfect completion and monopoly.
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